Were separately stated glider rental, tow, and flight-instruction charges taxable in Texas?

Plain-English summary

The Comptroller said the glider did not fit the aircraft definition in Tax Code § 151.328(c), so it did not qualify for that exemption and instead fell under Rule 3.294 on rentals and leases.

Because the business separately stated its charges, it had to collect tax on the glider rental and the tow charge, which was part of the rental. The instruction charge was nontaxable.

The business could buy its gliders tax-free with a resale certificate.

Common questions

Was the glider rental taxable? Yes.

Was the tow charge taxable? Yes.

Was flight instruction taxable? No.

Could the business buy the glider for resale? Yes.

Citations and references

• Tex. Tax Code § 151.328(c) — aircraft definition quoted in the letter.
• Texas Comptroller Rule 3.294 — rentals and leases.

Source

• STAR search: https://star.comptroller.texas.gov/search?doc_type_code=L&tax_type_code=SST
• Opinion: https://star.comptroller.texas.gov/view/8510L0667A14

Original ruling text

October 1, 1985

Dear ***:

This letter is in reference to our phone conversation concerning the
taxability of fight instruction in a glider plane.

Section 151.328 (c) of the tax code states:

(c) in this section, "aircraft" does not include a rocket or missile,
but does include:

(1) a fixed wing, heavier-than-air craft that is driven by propeller or
jet and supported by the dynamic reaction of the air against its wings;

(2) a helicopter; and

(3) an airplane flight simulator approved by the Federal Aviation
Administration for use as a Phase II or higher flight simulator under
Appendix H, 14 C.F.R. Part 121.

Since the glider does not fit this description it will not qualify for
exemption and will be governed by our Rule 3.294 (enclosed) concerning
rentals and leases.

You indicated that your charges are all separately stated, that is glider
rental fee, tow charge, and instruction. You will collect tax on the
rental fee of course and the tow charge which is considered to be a part
of the rental charge. The charge for instruction is not taxable.

You may purchase the glider(s) tax free by issuing a resale certificate.

This opinion is based on the facts presented. If there are additional
or different facts, the opinion may change.

If you have any questions or need more information, please call us at
1-800-252-5555 toll free from anywhere in Texas. You may write us at the
Tax Administration Division.

Sincerely,

Tax Policy Section
Tax Administration Division